Question

In determining the best companies to work for, a number of variables
are considered, including size, average annual pay, and turnover rate, etc. Moreover, employee
surveys are conducted in order to assess aspects of the organization's culture, such as trust and
openness to change. In an attempt to determine what affects turnover rate, a sample of 33
companies was randomly selected and data collected on the average annual bonus and turnover
rate (%) for 2015. In addition, a questionnaire was administered to the employees of each
company to arrive at a trust index (measured on a scale of 0-100). Below are the multiple
regression results.

Dependent Variable is Turnover Rate Coef 12.1005 -0.07149 SE Coef Predictor Constant Trust Index Average Bonus -0.0007216 0.0001481 4.87 0.000 0.7826 15.46 0.000 0.01966 -3.64 0.001 S 1.49746 R-Sq 79.6% R-3g(adj ) -78.3% - - Analysis of Variance MS 2 262.73 131.36 2.24 DF Source Regression Residual Error 30 67.27 Total 32 330.00

a) Write out the estimated regression equation.
b) Is the regression equation significant overall? Explain.
c) How much of the variability in Turnover Rate is explained by the regression equation?
d) State the hypotheses for testing the regression coefficient of Trust Index. Based on the
results, what do you conclude at ? = .01?
e) State the hypotheses for testing the regression coefficient of Average Annual Bonus.
Based on the results, what do you conclude at ? = .01?
f) Predict the turnover rate for a company with a trust index score of 70 and an average
annual bonus of $6500.
g) Comment on whether the assumptions/conditions for multiple regression are satisfied
based on the plots shown below.

Answer 1